Should Capital gains be taxed at a rate similar to income taxes?

[McSpriest]

Recently it has come to light that Mitt Romney despite making millions in carried income and capital gains pays "probably close to 15%" taxes by his own statement. This feat is due to the majority of his earnings coming from capital gains in the form of investment and carried over income.

Should Capital Gains be taxed in a bracket system similar to income taxes rather than a flat 15%?

Try to keep it somewhat civil, and if you are gonna post PLEASE try to read at least one of the articles.

below are links to the some Articles on the subject:
Businessweek: http://www.businessweek.com/magazine...-01182012.html
Washington Post: http://www.washingtonpost.com/politi...o6P_story.html
Forbes: http://www.forbes.com/sites/kellyphi...t-15-tax-rate/
NPR: http://www.npr.org/blogs/money/2012/...-is-15-percent
Yahoo: http://news.yahoo.com/15-why-mitt-ro...094500088.html

[Badpaladin]

I think it should be handled just like income taxes, bracketed according to how much money somebody makes.

[Epiphanes]

Technically speaking, what Mitt Romney pays out in taxes every year, even at 15%, is more than likely a larger sum than what 500+ people combined pay out every year. Middle Class sees tax returns; Upper Class sees tax payouts. I'm really not sure why people continue to ramble on about it.

It's like that video of Occupy Wallstreet. A business owner stated that he paid around 51% of his income, and his income was around $1.2M. Do the math. He more than paid his "fair share". Why are uneducated middle to lower class ignoramus's attempting to leech off of people who, like many other people, may have had very humble beginnings? It's a joke. That entire movement was a joke.

If you want an interesting conversation, how about socialism versus capitalism? If you take look at that question, you may realize what the true problem is.

[McSpriest]

oops a typo, could someone tell me how to fix the "ti" to "to" in the poll? or a mod fix that typo?

[Dacien]

Nope. Imagine the massive, crippling budget shortfalls that would occur if we did this. Hear me out!

State and local governments would start receiving more tax revenue, and start spending accordingly (this is what government does best). Then, when a lot of rich people have really bad year, you'd see the tax well run very dry. This would put us deeper into debt.

Bad idea in general to overly rely on the rich for tax money, and California is a good example.

[Badpaladin]

Bad idea in general to overly rely on the rich for tax money, and California is a good example.

California is an example of a decade of poor government, a retardedly massive housing bubble and general incompetency when dealing with equally retarded public sector unions. More tax revenue, at this point, is actually a great thing for our government.

[Dacien]

California is an example of a decade of poor government, a retardedly massive housing bubble and general incompetency when dealing with equally retarded public sector unions. More tax revenue, at this point, is actually a great thing for our government.

Well here's what I'm talking about, independent of bad government: http://www.lao.ca.gov/2005/rev_vol/r...ity_012005.pdf

Tax revenue fluctuations swing wildly because of overreliance on Capital gains and stock options.

[McSpriest]

Technically speaking, what Mitt Romney pays out in taxes every year, even at 15%, is more than likely a larger sum than what 500+ people combined pay out every year. Middle Class sees tax returns; Upper Class sees tax payouts. I'm really not sure why people continue to ramble on about it.

It's like that video of Occupy Wallstreet. A business owner stated that he paid around 51% of his income, and his income was around $1.2M. Do the math. He more than paid his "fair share". Why are uneducated middle to lower class ignoramus's attempting to leech off of people who, like many other people, may have had very humble beginnings? It's a joke. That entire movement was a joke.

If you want an interesting conversation, how about socialism versus capitalism? If you take look at that question, you may realize what the true problem is.

read the articles
mitt romney does not pay his"fair share" he set up his money in a way that he could earn millions and pay 15% its an option only really available for private equity. and by doing so he pays between 250k and 2M less in taxes a year... he saves more in taxes doing this then most families earn in a decade.

[krumz]

Tough call. I'd say probably not. My effective tax rate is about 10.5% and I make six figures, so he's paying more in taxes than I am, relatively speaking.

[McSpriest]

oops a typo, could someone tell me how to fix the "ti" to "to" in the poll? or a mod fix that typo?

still ...anyone?

[Badpaladin]

still ...anyone?

I think you'll need to get an admin to fix a poll. Not seeing anything I can do to change it.

[ati87]

Technically speaking, what Mitt Romney pays out in taxes every year, even at 15%, is more than likely a larger sum than what 500+ people combined pay out every year. Middle Class sees tax returns; Upper Class sees tax payouts. I'm really not sure why people continue to ramble on about it.

It's like that video of Occupy Wallstreet. A business owner stated that he paid around 51% of his income, and his income was around $1.2M. Do the math. He more than paid his "fair share". Why are uneducated middle to lower class ignoramus's attempting to leech off of people who, like many other people, may have had very humble beginnings? It's a joke. That entire movement was a joke.

If you want an interesting conversation, how about socialism versus capitalism? If you take look at that question, you may realize what the true problem is.

Absolute numbers are meaningless because the more you earn the less impact it has on you.

To keep it simple I will use a flat tax rate
If a person making 2000 a month pays 30% if his income to taxes he will end up with 1400 a month after taxes
Now if another person makes 1.000.000 a month and pays 30% he ends up with 700.000 a month

Now who will feel the 30% tax more the guy making 2000 or the guy making 1000000....The poor guy will be happy when he gets a 600 where the rich guy will laugh at 600.

But I guess you can't understand this

So let me give you another example.

VAT or sales tax is a much larger percentage of a normal persons income then the rich person. A average wage earner will probably spend most of his money on things he needs to actually eat and function and he or she will pay VAT for everything he or she buys.
The rich guy will of course be spending more money but not to the point it will make a difference. Even if he only eats expensive and buys expensive things it will still be a less percentage of his income.

The problem with capital gains is that in the US it isn't income that you get form investing in a company, but it is money you get by doing your job. Warren Buffet for example makes his money by investing for his clients and investing his own money. When he invest money for his clients he gets paid but that isn't counted as income earned by working, but they look at it as capital gains.
A good example I saw was how people like Ronmey bought ''bad'' companies, the company that bought the ''bad'' companies and charged them with fees, if everything went well they sold the company and paid capital gains tax and if things got bad they still made money because the advice fees where also taxed 15%

The first part is OK, but the second part where you pay 15% tax for doing your job isn't.

[Deleted]

Absolutely not. Infact, the whole concept of capital gains tax is extremely sketchy. It forces you to pay tax even if the real value of your investment doesn't increase, if there is inflation.

Example: I invest 1.000.000€ in something, and one year later it is worth $1.100.000€. That's a 10% nominal "profit". If the inflation is 10%, it means that the real value of my investment has gone up 0%.

Yet I have to pay taxes on the inflation. Let's assume 30% capital gains on the $100.000 profit, which is $30.000. I now have $1.070.000, which is less than I had one year ago thanks to the inflation & capital gains tax.

[McSpriest]

Absolutely not. Infact, the whole concept of capital gains tax is extremely sketchy. It forces you to pay tax even if the real value of your investment doesn't increase, if there is inflation.

Example: I invest 1.000.000€ in something, and one year later it is worth $1.100.000€. That's a 10% nominal "profit". If the inflation is 10%, it means that the real value of my investment has gone up 0%.

Yet I have to pay taxes on the inflation. Let's assume 30% capital gains on the $100.000 profit, which is $30.000. I now have $1.070.000, which is less than I had one year ago thanks to the inflation & capital gains tax.

thats not how real investments work, specifically the "carried income" and co-investments that Mitt Romney uses. In fact he put up only a couple of percent (1-3%) of the capital and take out 30% on the return

[sinderborn]

I second Diurdi. The lower Cap gains rates are a political compromise between people who understand the impact of inflation on capital investment (and so see no real purchasing power increase from inflationary "gains") and those who don't. Of course, if you don't like capital investment, tax away. And on the subject of carried interst, its quite a bit more complicated than "ooh, put that in the carried interest bucket and get taxed at 15%."

Really wish people did some studying on what and why before they held forth opinions that would have severe negative consequences to capital formation. Nah, just eat the rich. Mmmmm tasty!

[Badpaladin]

The biggest issue is many so-called job creators who benefit from Capital gains aren't really job-creators, which sort of kills the point of letting them have money to stimulate the economy in the first place.

[sinderborn]

Letting them have money? Are you talking about massive government investment in private sector business a'la GM or setting tax rates?

[Badpaladin]

Letting them have money? Are you talking about government handouts a'la GM or setting tax rates?

I guess you could call it a government handout by not having to pay it as income tax.

[Purlina]

Absolutely not. Infact, the whole concept of capital gains tax is extremely sketchy. It forces you to pay tax even if the real value of your investment doesn't increase, if there is inflation.

Example: I invest 1.000.000€ in something, and one year later it is worth $1.100.000€. That's a 10% nominal "profit". If the inflation is 10%, it means that the real value of my investment has gone up 0%.

Yet I have to pay taxes on the inflation. Let's assume 30% capital gains on the $100.000 profit, which is $30.000. I now have $1.070.000, which is less than I had one year ago thanks to the inflation & capital gains tax.

Currently the LTCG rate is at 15%. Not sure inflation would be much of an issue if the investment was for less then 1 year

Also inflation of 10% seems really high. I mean in that case many of our salaries would not be able to keep up with inflation.

[McSpriest]

I second Diurdi. The lower Cap gains rates are a political compromise between people who understand the impact of inflation on capital investment (and so see no real purchasing power increase from inflationary "gains") and those who don't. Of course, if you don't like capital investment, tax away. And on the subject of carried interst, its quite a bit more complicated than "ooh, put that in the carried interest bucket and get taxed at 15%."

Really wish people did some studying on what and why before they held forth opinions that would have severe negative consequences to capital formation. Nah, just eat the rich. Mmmmm tasty!

I have a degree in Econ, I've studied it (although i'm in architecture now)

I understand the consequences of limiting investment spending through outside economic forces. however in many cases we see that capital gains are earned from what is essentially non-investment income (investing in your own company does not spur any additional job growth). and i don't mean people investing in a start up company they are working on i mean investing in a carried income package to legally count you income as capital gains and therefore pay 15% on what would otherwise be taxed at a higher rate. this isn't "investing" as much as it is gaming the system to manipulate your tax rate.

he essentially invested in himself